Morgan Stanley Acquires CityMortgage Bank

Purchases Leading Russian Mortgage Bank Based in Moscow

London —

Morgan Stanley (NYSE: MS) announced today that it has acquired CityMortgage Bank, a leading Moscow-based mortgage bank that specializes in originating, servicing and securitizing residential mortgage loans in the Russian Federation. Terms of the transaction were not disclosed.

The transaction advances Morgan Stanley’s strategy of building a global, vertically- integrated residential mortgage business. “The acquisition of CityMortgage Bank is another important step in our long-term strategy of broadening the Firm’s global franchise in the residential mortgage business,” said Anthony Tufariello, Global Head of the Securitized Products Group at Morgan Stanley.  “Taken together with the continuing expansion of our UK and Italian residential mortgage platforms and our purchase of Saxon Capital, Inc. in the U.S., this acquisition illustrates that our strategy is truly global.”

“We are extremely excited to be a significant player in this promising new market at this stage in its development,” said David Spector, head of Morgan Stanley’s European residential mortgage business.  “Russian economic fundamentals are strong and a robust and growing mortgage market is supported by recent securitisation and creditor-friendly legislation.  This acquisition demonstrates our commitment to leveraging our first-class capital markets franchise on a pan-European scale.”

“Morgan Stanley is committed to Russia and since 1994 has been aggressively building a market-leading M&A and capital markets business,” said Rair Simonyan, Morgan Stanley’s Country Head for Russia.  “Participating in the fast-growing mortgage market represents an important expansion of our Russian franchise.”

“We are very excited about the capabilities Morgan Stanley will provide,” said Nicholas Chitov, CEO of CityMortgage Bank.  We will gain access to global best practices in securitisation structuring, distribution and systems.  In addition, their strategic vision is very much aligned with management's own ambitious growth plans for the Bank.”

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services.  The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 30 countries.  For further information about Morgan Stanley, please visit www.morganstanley.com.

CityMortgage Bank (CMB) is a leading specialist mortgage bank in the Russian Federation.  The Bank was formed with the participation of ROSGOSSTRAKH, the leading Russian insurance company, and started mortgage operations in Moscow in March 2004. Currently CMB operates in 12 regions of the Russian Federation.  Since its inception, CMB has originated more than US $ 300 million in Russian residential mortgages.

Note to Editors: 

Morgan Stanley has a strong presence in the global RMBS markets and has a comprehensive mortgage origination and securitization platform.  The Firm’s strategy is to build a global, vertically-integrated residential mortgage business.  Underlining the Firm's commitment, Morgan Stanley has made a number of acquisitions as part of building its mortgage platform:

  • In December 2006, the Firm acquired Saxon Capital, a premier servicer and originator of residential mortgages in the US;
  • In June 2006, the Firm acquired Fonspa, an Italian mortgage bank and servicer;
  • In December 2005, the Firm purchased Advantage Home Loans, a U.K. based mortgage packager.

Contact: Media Relations, Erik Portanger, +44.20.7425.8425